House of Representatives

Tax Laws Amendment (2007 Budget Measures) Bill 2007

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello MP)

General outline and financial impact

Increasing the dependent spouse tax offset

Part 1 of Schedule 1 to this Bill amends the Income Tax Assessment Act 1936 to increase the dependent spouse tax offset to $2,100 from 1 July 2007.

The full dependent spouse tax offset is available to a resident taxpayer who contributes to the maintenance of a resident spouse whose separate net income does not exceed $282.

Date of effect : These amendments apply to assessments for the 2007-08 income years and later income years.

Proposal announced : This measure was announced in the 2007-08 Budget. It was also announced in the Treasurer's Press Release No. 036 of 8 May 2007.

Financial impact : This measure will have these revenue implications:

2007 - 08 2008 - 09 2009 - 10 2010 - 11
-$20m -$130m -$135m -$140m

Compliance cost impact : Nil.

Medicare levy and Medicare levy surcharge low-income thresholds

Part 2 of Schedule 1 to this Bill amends:

the Medicare Levy Act 1986 to:

-
increase the Medicare levy low-income thresholds for individuals and families. The dependent child/student component of the family threshold will also be increased. The increases are in line with movements in the consumer price index (CPI); and
-
increase the Medicare levy low-income threshold for pensioners below age pension age so that they do not have a Medicare levy liability where they do not have an income tax liability; and

the A New Tax System (Medicare Levy Surcharge-Fringe Benefits) Act 1999 to:

increase the Medicare levy surcharge low-income threshold in line with movements in the CPI.

Date of effect : The increased Medicare levy and Medicare levy surcharge low-income thresholds apply from the 2006-07 income year and later income years.

Proposal announced : This measure was announced in the 2007-08 Budget and in the Minister for Revenue and Assistant Treasurer's Press Release No. 047 of 8 May 2007.

Financial impact : This measure will have these revenue implications:

2007 - 08 2008 - 09 2009 - 10 2010 - 11
-$60m -$30m -$30m -$30m

Compliance cost impact : Negligible.


View full documentView full documentBack to top